Сomparative analysis of cross-cultural awareness and foreign economic relations of Great Britain and the Netherlands

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Contents

Introduction

1. Comparative analysis of international business in selected countries

1.1 Assessment and analysis of the degree of the UK integration in the global space

1.2 Assessment and analysis of the degree of Netherlands integration in the global space

1.3 Comparison of selected countries on key indicators of the level of international integration

1.4 Conclusion about the openness Great Britain and Netherlands for business

2. Identify the impact of cross-cultural characteristics of selected countries to the management style

2.1 Formation cultural profile of the UK

2.2 Advice on doing business in the UK

2.3 Formation cultural profile of the Netherlands

2.4 Advice on doing business in the Netherlands

2.5 Comparison of cultural profiles

3. Comparison forms of business management in the UK and the Netherlands as an example of individual companies

3.1 BP plc (UK)

3.2 Phillips (Netherlands)

3.3 Comparison companies

3.4 Level of presence of these companies in Russia

Conclusion

Literature



Introduction

Internationalization of economic life on a global scale is a real and objective process . Deepening integration processes and the international division of labor , rapidly growing foreign investment , the world becomes a global village . The most important role in these processes play a multinational company , practically forming the contours of the world economy . Companies decide on the deployment of its productive forces not only in domestic markets but also abroad , by taking into account the benefits of international diversification . International competition and the international nature of the production companies dictate management strategies and organizations that have strengthened their competitive comparative advantage.

Management of international firms complicated compared to the national management as a result of the need to take into account national differences of an economic , political, legal and cultural order in a business organization. To adequately respond to the demands of the changing international environment , international managers should emphasize the formation of a positive corporate culture , adaptation strategies , organizational structures and forms of coordination and control to the specific conditions of competition.

Purpose of this course work is a comparative analysis of the two countries ( the UK and Netherlands) to identify opportunities for doing business in Russia.

Based on the objective were withdrawn following tasks:

• evaluate and analyze the degree of integration of the selected countries in the world space

• to conclude that the opening / closing of the selected countries for international business

• identify the effect of cross-cultural characteristics of selected countries in the management style

• analyze two companies from each country, to compare the parameters of the measurement level ahead of the presence of these companies in Russia

1) The role of the UK in the modern international cooperation

In our days, the UK plays an important role in the work of the EU, UN and NATO. Great Britain has entered in the EU only under special conditions, as it saves control of its currency, not agreeing on the common economic space and in many other areas, such as agriculture - 40-50% of which is financed from the state budget and produced in great Britain agricultural products below EU standards.

Great Britain takes the third place in the world in terms of GNP after the USA and Germany. Now the backbone of its economy is not the production but services and increasing importance of electronic Commerce. The city of London is a major global financial centre. The wealth of many Britons are now higher than ever in history, however, recent studies have shown that the level of child poverty in the country takes the second place in the EU. Great part of the heritage of great Britain came from leaching and destruction of the former colonies (from the last colony of India, the UK was published in 1948, formally, actually retained full economy control) economies.

2) The level of UK foreign economic relations with Russia

Economic co-operation continues to be one of the priority areas of the Russia-UK relations. The UK remains one of Russia's leading foreign trade and investment partners. Trade volumes have recovered after a slowdown caused by the global financial crisis and reached $23.2 bln in 2012. Britain was fifth in accumulated foreign investments in Russia, totaling $26.7 bln in 2012. Today hundreds of British companies continue to successfully operate in the Russian market. Russian business presence in the UK is expanding too. Among the most attractive areas of investment co-operation are the financial sector, retail trade, mechanical engineering, metallurgy, mineral resources industry, transport, communications, pharmaceuticals, real estate. Bilateral dialogue between regions is also becoming more active and increasingly involves Russian as well as British regions.

The London Stock Exchange remains a leading international platform for our companies working with investors in the global capital markets with more than 60 Russian and Russian-focused companies traded in London. Among them - Sberbank, Gazprom, Lukoil, Rosneft, Norilsk Nickel, VTB, X5 Retail Group, SISTEMA, MegaFon and others.

The two countries' governments are actively promoting further expansion of our economic co-operation, which is one of the primary elements for ensuring positive development of Russia-UK relations. The 9th meeting of the Intergovernmental Russian-British Steering Committee on Trade and Investment (ISC) was held in October 2012 in London. At the meeting the business representatives of our countries confirmed their interest towards further intensification of co-operation for modernization and development of knowledge-based areas of economy, including innovations and nanotechnology, financial services and the creation of an international financial centre in Russia, as well as energy and energy efficiency, preparation of large-scale international sports events, small and medium enterprise development, and others. Britain is one of the most important business partners of Russia. According to all available statistics, UK confidently ranks among the four leading foreign investors. In the direct investments and securities UK divides the second place with Germany and Switzerland. The largest British companies in key sectors, including energy, telecommunications, banking, trade, and consumer goods, have adopted long-term liabilities on the Russian market. Despite the difficulties caused by the devaluation of the ruble in August 1998, British companies continue to trade and investment in Russia. In its activities in Russia, having a wide spectrum: from the delivery of mining equipment to the sale of children's clothes, they work closely with Russian partners. It is obvious that in the interests of both countries the volume of trade and investment should grow. For Russia British business seems to be the source of investments and experience, which can make a valuable contribution to the reform and economic recovery. Britain is also a growing export market for Russian firms. For British companies, Russia is potentially a huge market, which is not far from the UK. However, one should not underestimate the temporary difficulties. Seven months after the August crisis, the trade turnover of the majority of British companies operating in Russia, decreased seven times compared with last year. The resumption of growth will be faster, if the obstacles in the development of our economic relations will be reduced or excluded at all. Overcoming these obstacles will bring equal benefit to Russian and British companies and help to reveal the possibilities of Russian economic growth.

3) International UK companies in Russia

Priority industry for British business is and will be Russia's energy sector: if you the largest oil or gas company, you should be in Russia. Risks from work are high in Russia, and only on the income derived from work in energy sector justifies spent forces. One of the largest British companies involved in this business is BP International. BP operates on the Russian oil and gas market since the early 90-ies. In 1997, BP acquired a 10% stake in the oil company «SIDANKO», which at that time occupied the 4th place among the largest Russian oil corporations. In 2002, BP increased its stake in SIDANCO to 25% plus one share. In 2003 as a result of the unification of the Russian assets of BP and TNK, was established company TNK-BP. The company, which employs about 50,000 people, is represented in all major oil and gas regions of Russia.

For the period from 2003 to 2012, TNK-BP, the third largest vertically integrated oil and gas company in Russia, has received more than $55 billion of net profit. Production growth for nine years exceeded 40%, and total proved reserves (according to the classification of the securities Commission and US markets) in the period from 2003 to 2012 grew by more than 30%. High results of TNK-BP have been largely achieved thanks to the latest technologies and business processes, implemented with assistance of specialists from BP. Over its history, TNK-BP paid BP as a shareholder with about $19 billion of dividends, as well as more than $190 billion in taxes and duties to the budget of the Russian Federation. These results are a sign of successful joint work of BP with the professionals of the oil industry in Russia. Acquisition of a significant share of Rosneft shares, the world's largest public company in terms of production, allows BP to keep strong positions in the Russian market. The activity of BP in Russia is not limited to oil and gas projects. The contribution of BP in support of social, educational, cultural and charity projects is one of the most ambitious investment among foreign companies presented in Russia.

The second attractiveness industry for British business in Russia is the tobacco business. «British American tobacco» and «Gallagher» occupy a leading position in the tobacco market of Russia. Their investments in the tobacco factories of Moscow, St. Petersburg and Saratov exceed $ 700 million. In 2002, the BAT accounted for about 14% of the production of cigarettes in Russia. It owns three large factories - «Java» in Moscow, the tobacco factory in Saratov, and also a factory «Rothmans-Neva» in Saint-Petersburg. The equal share in Russian manufacture is owned by firm «Gallagher», which in 2000 acquired Moscow factory «Liggett-Dukat». The activities of the British tobacco companies on the Russian market is in a situation of overproduction of tobacco products. This intensifies competition between their producers. In these circumstances, the British Corporation spend considerable means for the promotion of their brands and development of the system of distribution of finished products. Simultaneously British companies increase their export from Russia. Among the 13 factories - exporters - «Liggett-Dukat», «BAT-Yava» and «Rothmans-Neva».

The third attractiveness of the industry for the British multinational companies is pharmaceuticals, which are presented by two «giants»: AstraZeneka and GlaxoSmithKline Plc. GlaxoSmithKline is one of the world's leading pharmaceutical companies. International company GlaxoSmithKline was formed by the merger of two major pharmaceutical companies, Glaxo Wellcome and SmithKline Beecham in January 2001, The company accounts about 5.3% of the global pharmaceutical market. GlaxoSmithKline takes leading positions by a number of developments in the field of immunization, and new drugs for the treatment of oncological diseases.Companies now included in GlaxoSmithKline, are present in the Russian market since the 1980s. Currently, the company is present in all regions of Russia, with representative offices in Moscow, Saint-Petersburg, Ekaterinburg, Rostov-On-Don, Novosibirsk, and its staff numbers more than 700 people. In Russia it is registered more than 120 drugs, representing a wide range of company medicines: antibacterial and antiviral drugs, including drugs against HIV-infection, cancer drugs, medicines for treatment of respiratory diseases, Central nervous system, gastrointestinal tract, metabolic disorders and vaccines.

«AstraZeneca», British Swedish pharmaceutical company, opened its representative office in 1999 in Russia. Today AstraZeneca Russia» - one of the most dynamic companies both in terms of growth in the number of patients receiving treatment with the use of its innovative products, and increased sales. The company has its representatives in 68 towns of Russia. About 40 original products of the company are registered and approved for use in the country. «AstraZeneca» offers physicians and patients in Russia modern high-quality drugs, whose effectiveness has been proved and confirmed in course of numerous clinical studies. The number of employees in Russia is about 1200. In promotion of their products «AstraZeneca» is guided by the highest ethical standards and does everything to provide doctors and patients with the most complete and reliable information about innovative approaches to treatment of socially significant diseases. Russia is one of the priority markets for AstraZeneca. Support of the Government of the Russian Federation on modernization of healthcare, «AstraZeneca» is making a significant contribution to the Russian economy. The overall contribution of AstraZeneca in the economy of the country within the nearest 5 years will amount to $1.2 billion This includes investments in production and R&D, training and development of employees and marketing opportunities, as well as in further development of new channels and information exchange technologies with the medical community. In 2011, the company announced the localization of production in Russia to increase the availability of innovative medicines for Russian patients. On the territory of Kaluga region, the construction of the pharmaceutical pharmaceutical factory of a full cycle, from preparation of medicinal forms to the packaging. In addition to the localization of production, «AstraZeneca» is realized in Russia large-scale projects in the field of support for research and development (R&D). As a socially responsible company, «AstraZeneca» is implementing a number of initiatives aimed at improving health and quality of life of patients, and also to raise awareness about socially significant diseases. Among these projects is the support of world Mental Health Day and the contest «achievements in the field of mental health, as well as participation in the unique national project «Your health - the future of Russia», which aims to increase the number of diagnosed patients with high cardiovascular risk, the increasing interest of the population to their health and to the early start of treatment.

4) The role of the Netherlands in the modern international cooperation

Modern Netherlands - industrial country with intensive agriculture and development of foreign economic relations. Kingdom of the Netherlands , with a population of only 0.3 % of the world population , according to the International Monetary Fund (IMF ) is the eighteenth largest economy in the world and a major player in international investment . Netherlands ranks 9th among importing countries , 2nd place in the world among countries exporting agricultural products and 7th place in the list of leading trading nations of the world . On the Netherlands accounted for over 4 % of world trade .

Netherlands - a country with an open economy , which has a favorable geographical position to attract foreign companies active not only in the Netherlands, but also in neighboring European countries . The role and place in the world economy of the Netherlands is determined primarily on the orientation of the country's export- import transactions ( " Gate of Europe" ) .

According to a rating agency Bloomberg (Best Countries for Business , 2013) Netherlands occupies first place in the ranking of the most attractive countries for doing business in Europe and fourth place - in the world. The main advantage of the Netherlands are the lowest cost of doing business , namely the small cost of transporting goods and low operating costs.

5) The level of the Netherlands foreign economic relations with Russia

Relations between Russia and the Netherlands are developing dynamically in deepening the partnership. Recent history is full of bilateral political contacts contacts at the highest levels , including meetings " on the margins " of international events

The major direction of bilateral relations - trade, economic and investment cooperation. By the results of 2012 the volume of Russian - Dutch turnover increased in comparison with 2011 by 20.6 % and amounted to 82.7 billion dollars As a result, the Netherlands took the first place among foreign trade partners of Russia in Europe and the second (after China ) - in world. The positive balance of trade with Russia in the Netherlands in 2012 amounted to 70.8 billion dollars

In the Netherlands is exported , mainly minerals and fuels ( 87.8 % of total exports ) , as well as metals . Imported from the Netherlands , primarily machinery and equipment ( 36.5 % of total imports ), foodstuffs and agricultural products (29.5% ) and chemical products ( 24.9 %).

Investment cooperation between Russia and the Netherlands shows a steady positive trend. Since 2002 , the Netherlands has a more than tenfold increase investments in the Russian economy and take on this ) second only place in the world after Cyprus .

In Russia, opened more than 300 offices of the Dutch firms , and the number of enterprises with the participation of the Dutch capital has exceeded 800 . Concerns " Shell " and " Unilever " with Dutch capital involved in the work of the Advisory Council on Foreign Investments in the Russian Federation Government .

Effective tool enhancing business relations - The Joint Commission on Economic Cooperation ( CMEC ) , co-chaired by Deputy Prime Minister of the Russian Federation Arkady Dvorkovich (June 2012) and Minister for Foreign Trade and Development Cooperation of the Netherlands L.Plumen (from January 2013 ) .

The most significant events of the last period , related to the activities of the Commission - the opening of Russia's first liquefaction plant natural gas on Sakhalin Island in February 2009 , a ceremony in Vyborg in April 2010 , dedicated to the start of construction of the North European Gas Pipeline , a visit in May 2010, on the Yamal Peninsula representative delegation of Dutch businessmen interested in developing oil and gas fields of the Yamal region - Kara Sea .

Since 2005, the Russian initiated by the Joint Business Council ( "Russian- Dutch dialogue on trade and economic cooperation " ) . Under its aegis, " captains " Dutch business met with Putin in 2007 in Moscow and Medvedev in 2009 in Amsterdam. In November 2012 at the initiative of the " Amount" in Moscow formed the Association of Russian- Dutch business cooperation.

The most important area of cooperation is energy. In September 2009, "Lukoil " has acquired 45% stake in the refinery "Total Raffinaderey Nederland " located at g.Flissingen . In August 2010, an agreement was signed between "Gazprom export" and the operating company " TAKA Energy " on construction in the Netherlands near g.Bergermeera Europe's largest underground gas storage .

Fundamental importance for the energy security of Europe have no connection between "Gazprom " and " Gasunie " , primarily , their interaction in the construction of the pipeline "Nord Stream" . In June 2010, between these companies signed program of scientific and technical cooperation for 2010-2012 and a new Memorandum of Understanding on strategic cooperation . In March 2011, established the Coordinating Council of the Russian and Dutch representatives.

Active cooperation has been established in the field of agriculture. Dutch exports to Russia are increasing livestock , breeding poultry and hatching eggs ; implementing joint ; projects in pig breeding , the creation in Russia of modern incubators and greenhouses .

Positive trend for cooperation in the field of high technology and innovation. Promising directions here are polymer and nanoelectronics , nanomaterials , medical nanodiagnostics . Created four joint research laboratory on the basis of parity funding. Being implemented innovative project to develop and manufacture in Russia of high-tech medical equipment between NIPK "Electron" and concern " Phillips " . Dutch research centers are invited to cooperate in the field of basic and applied research .

Developing cooperation in the fields of science, technology and higher education . Successfully operating Russian- Dutch Committee for cooperation in scientific research; most progress in the four joint laboratories for long-term programs : membrane technology , optical chemical sensors , medical nanodiagnostics , nanocomposites and hybrid coating. Since 2009, in Moscow operates Dutch Education Center (NESO-Russia). Established direct partnerships between a number of Russian and Dutch universities.

6) The international Netherlands companies in Russia

Netherlands lead international cooperation with Russia in the following sectors:

* Agriculture: livestock , horses , vegetables , poultry , gardening and farming.

* Construction: design, management and maintenance of project management, construction management , organization of tenders , highly professional consulting services, based on Western technology .

* The latest energy efficient lighting systems (with energy-saving light bulbs to complex urban lighting , traffic lights , etc.).

* Healthcare: equipment for cardiac care, acute care and home health care .

* Fire safety systems , fire-retardant coating for steel, wood and cable processing.

* Automated lubrication systems for road transport industry component parts for commercial vehicles .

* Equipment for the food industry (meat processing industry) .

* Banking, legal services.



1. Comparative analysis of international business in selected countries

1.1 Assessment and analysis of the degree of the UK integration in the global space

The KOF Index of Globalization measures the three main dimensions of globalization:

1. Economic, characterized as long distance flows of goods, capital and services as well as information and perceptions that accompany market exchanges;

2. Political globalization, characterized by a diffusion of government policies;

3. Social globalization, expressed as the spread of ideas, information, images and people.

Economic Globalization

Broadly speaking, economic globalization has two dimensions. First, actual economic flowsare usually taken to be measures of globalization. Second, the previous literature employs proxies for restrictions to trade and capital. Consequently, two indices are constructed that include individual components suggested as proxies for globalization in the previous literature.

Actual Flows: The sub-index on actual economic flows includes data on trade, FDI and portfolio investment. Data on trade are provided by the World Bank (2011), stocks of FDI (normalized by GDP) are provided by UNCTAD STAT (2011). Portfolio investment is derived from the IMF's International Financial Statistics (December 2011). More specifically, trade is the sum of a country's exports and imports and portfolio investment is the sum of a country's stock of assets and liabilities (all normalized by GDP).

While these variables are straightforward, income payments to foreign nationals and capital are included to proxy for the extent that a country employs foreign people and capital in its production processes.

Restrictions: The second index refers to restrictions on trade and capital using hidden import barriers, mean tariff rates, taxes on international trade (as a share of current revenue) and an index of capital controls. Given a certain level of trade, a country with higher revenues from tariffs is less globalized. To proxy restrictions of the capital account, an index constructed by Gwartney et al. (2011) is employed. This index is based on the IMF's Annual Report on Exchange Arrangements and Exchange Restrictions and includes 13 different types of capital controls. The index is constructed by subtracting the number of restrictions from 13 and multiplying the result by 10. The indices on mean tariff rates and hidden import barriers are also derived from Gwartney et al. (2011). Mean tariff rates originate from various sources.

Gwartney et al. allocated a rating of 10 to countries that do not impose any tariffs. As the mean tariff rate increases, countries are assigned lower ratings. The rating will decline toward zero as the mean tariff rate approaches 50 percent (which is usually not exceeded by most countries among their sample). The original source for hidden import barriers, finally, is the

World Economic Forum's Global Competitiveness Report (various issues).

Social Globalization

The KOF index classifies social globalization in three categories. The first covers personal contacts, the second includes data on information flows and the third measures cultural proximity.

Personal Contacts: This index is meant to capture direct interaction among people living in different countries. It includes international telecom traffic (traffic in minutes per person) and the degree of tourism (incoming and outgoing) a country's population is exposed to.

Government and workers' transfers received and paid (in percent of GDP) measure whether and to what extent countries interact, while the stock of foreign population is included to capture existing interactions with people from other countries. The number of international letters sent and received also measure direct interaction among people living in different countries. Telecom traffic is provided by the International Telecommunication Union (2011), while the number of letters is taken from the Universal Postal Union's Postal Statistics

Database. The remaining three variables are from the World Bank (2011).

Information flows: While personal contact data are meant to capture measurable interactions among people from different countries, the sub-index on information flows is meant to measure the potential flow of ideas and images. It includes the number of internet users (per 100 people), the share of households with a television set, and international newspapers traded (in percent of GDP). All these variables to some extent proxy people's potential for receiving news from other countries - they thus contribute to the global spread of ideas. The variables in this sub-index derive from the World Bank (2011), International Telecommunication Union

(2011), the UNESCO (various years), and the United Nations Commodity Trade Statistics Database (2011).

Cultural Proximity: Cultural proximity is arguably the dimension of globalization most difficult to grasp. Dreher (2006) suggests the number of English songs in national hit lists or movies shown in national cinemas that originated in Hollywood. However, these data lack for the majority of countries in our sample. Instead, we thus use imported and exported books (relative to GDP), as suggested in Kluver and Fu (2004). Traded books proxy the extent to which beliefs and values move across national borders, taken from the UNESCO (various years), and the United Nations Commodity Trade Statistics Database (2011).

According to Saich (2000, p.209) moreover, cultural globalization mostly refers to the domination of U.S. cultural products. Arguably, the United States is the trend-setter in much of the global socio-cultural realm (see Rosendorf, 2000, p.111). As an additional proxy for cultural proximity we thus include the number of McDonald's restaurants located in a country. For many people, the global spread of McDonald's became a synonym for globalization itself. In a similar vein, we also use the number of Ikea per country.

Political Globalization

To proxy the degree of political globalization we employ the number of embassies and high commissions in a country and, the number of international organizations to which the country is a member and the number of UN peace missions a country participated in. In addition, we include the number of treaties signed between two or more states since 1945. These data are taken from the Europa World Yearbook (2010), the CIA World Factbook (various years), the UN Department of Peacekeeping Operations, and the United Nations Treaties Collection.

In addition to three indices measuring these dimensions, we calculate an overall index of globalization and sub-indices referring to:

* actual economic flows

* economic restrictions

* data on information flows

* data on personal contact

* data on cultural proximity.

According KOF 2009 data, United Kingdom has following rates:

Overall globalization index - 85,53761

Economic globalization - 77,73384

-actual flows- 65,64362

-restrictions - 89,82408

Social globalization - 85,50378

-personal contact - 76,24541

-information flows - 88,089

Political globalization - 96,43294

What does it mean?

In general, Great Britain has rather high rates in all dimensions, analyzing its overall globalization index we can say that United Kingdom is highly globalised country but it can improve its rates, especially in economy.



1.2 Assessment and analysis of the degree of Netherlands integration in the global space

Globalization (Overall) - 91.17

Economic Globalization - 90.72

Social globalization - 88.91

Political globalization - 95.11

What does it mean?

Thus, the Netherlands is globalized country, which directly affects the process of world globalization.

1.3 Comparison of selected countries on key indicators of the level of international integration

management style integration international

Thus, evaluating the performance of the UK and Holland, we can say that the level of globalization of the Netherlands is much higher. This is due to a number of factors described above. (all indicators of globalization Netherlands ahead of the UK)

1.4. Conclusion about the openness Great Britain and Netherlands for business.

The UK has always been an open economy. However, by further opening its economy to exports, imports, international skilled labour and capital, the UK can benefit from a virtuous cycle of increased competitiveness, productivity and growth. Openness is promoted by:

* Securing market access to trade in both exports and imports at every stage of the value chain

* Increasing access to labour and investment through migration and capital flows

* Improving the business climate for foreign direct investment

* Having a regulatory climate that is both competitive and enabling to trade. Empirically, the link between international openness and productivity growth is backed by a study of 93 countries by the National Bureau of Economic Research (NBER), which found a clear link between openness and trend productivity growth, even after controlling for reverse causality (as well as openness driving productivity, increased productivity can drive greater openness).

To manage this openness effectively, however, domestic policy needs to be adapted to ensure that the UK economy is best placed to face the opportunities and challenges that being open to globalisation brings. The creation of an appropriate industrial strategy to maximise investment in productive sectors is essential, as is the need for suitable measures to handle the transition costs of structural changes to employment, managed migration, and skills policies to make sure the UK stays ahead of its competitors.

As for the Netherlands, transnational corporations - is the brainchild of Dutch. «VOC» (« The Dutch East India Company" ) for two centuries was the largest and most powerful trade organization in the world . Today «Philips», «Unilever» and «Royal Dutch Shell» ( together with two other firms , not known outside of the country ) is occupied by a quarter of the working age population of the Netherlands. The Dutch, however, do not stop and supply managers for foreign multinationals . And those , thanks to the ability for languages ??, and the ability to negotiate and only in extreme cases, to untie the ribbon purse , quickly find themselves in the seat of the head of government.

Once plowed the oceans merchant ships gave way cargo van - now 40 % of the international road haulage carried Dutch. True to the spirit of their ancestors hunted trade, the Dutch , as of old , and are skilled intermediaries with considerable profit by them come true Bringing to mind the products of other countries. They import and produce chemicals including fertilizers , gas heat ( only their minerals ) huge greenhouses, where the markets of Europe comes tomatoes, cucumbers, tulips, carnations , freesia and more. More than 60% of cut flowers in the world and 50 % of the plants in pots, but not all of them are grown here, go through the local auction giant . Dutch so tightly held in the hands of the market that farmers from other countries , in order to get the best price, send flowers for sale in the Netherlands - only to flower traders brought them back again .

Dutch openness extends to the economy. It is known that excessive fuss about charters and all restrictions bad effect on trade, and the financial market is no exception to the rule. Several centuries ago, Amsterdam Trade Bank was the largest commercial lending institution in the world. Outlandish sovereigns took his loans to finance military campaigns, and there postponed saving for a rainy day - suddenly happen that they will fly with high chairs. And still today, which promise great benefits gaps in the tax laws to this area involve foreign investors. A highly commendable transport system and the ability of local residents to give the Dutch language field activity even greater appeal. Increasingly, American and Japanese companies intending to enter new markets , locate its European headquarters in the Dutch capital Amsterdam.

Moderation bordering asceticism - this is the style of the local offices. Dutch, even when it comes to advertising and letterhead , do not go beyond prudence.



2. Identify the impact of cross-cultural features of Great Britain and the Netherlands to the management style

2.1 Cultural profile of the UK

Hofstede's Cultural Dimensions model

What about the UK?

If we explore the British culture through the lens of the 5-D Model, we can get a good overview of the deep drivers of British culture relative to other world cultures.

Power distance

This dimension deals with the fact that all individuals in societies are not equal - it expresses the attitude of the culture towards these inequalities amongst us.

Power distance is defined as the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally.

At 35 Britain sits in the lower rankings of PDI - i.e. a society that believes that inequalities amongst people should be minimized. Interestingly is that research shows PD index lower amongst the higher class in Britain than amongst the working classes.

The PDI score at first seems incongruent with the well established and historical British class system and its exposes one of the inherent tensions in the British culture - between the importance of birth rank on the one hand and a deep seated belief that where you are born should not limit how far you can travel in life. A sense of fair play drives a belief that people should be treated in some way as equals.

Individualism

The fundamental issue addressed by this dimension is the degree of interdependence a society maintains among its members. It has to do with whether peopleґs self-image is defined in terms of “I” or “We”.

In Individualist societies people are supposed to look after themselves and their direct family only. In Collectivist societies people belong to `in groups' that take care of them in exchange for loyalty.

At a score of 89 the UK is amongst the highest of the individualistic scores, beaten only by some of the commonwealth countries it spawned i.e. Australia and the USA.

The British are a highly individualistic and private people. Children are taught from an early age to think for themselves and to find out what their unique purpose in life is and how they uniquely can contribute to society. The route to happiness is through personal fulfillment. As the affluence of Britain has increased throughout the last decade, with wealth also `spreading North', a much discussed phenomenon is the rise of what has been seen as rampant consumerism and a strengthening of the `ME' culture.

Masculinity / Femininity

A high score (masculine) on this dimension indicates that the society will be driven by competition, achievement and success, with success being defined by the winner / best in field - a value system that starts in school and continues throughout organisational behaviour.

A low score (feminine) on the dimension means that the dominant values in society are caring for others and quality of life. A feminine society is one where quality of life is the sign of success and standing out from the crowd is not admirable. The fundamental issue here is what motivates people, wanting to be the best (masculine) or liking what you do (feminine).

At 66 Britain is a masculine society - highly success oriented and driven. A key point of confusion for the foreigner lies in the apparent contradiction between the British culture of modesty and understatement which is at odds with the underlying success driven value system in the culture. Critical to understanding the British is being able to `'read between the lines'' What is said is not always what is meant. In comparison to feminine cultures such as the Scandinavian countries, people in the UK live in order to work and have a clear performance ambition.

Uncertainty avoidance

The dimension Uncertainty Avoidance has to do with the way that a society deals with the fact that the future can never be known: should we try to control the future or just let it happen? This ambiguity brings with it anxiety and different cultures have learnt to deal with this anxiety in different ways. The extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these is reflected in the UAI score.

At 35 the UK has a low score on uncertainty avoidance which means that as a nation they are quite happy to wake up not knowing what the day brings and they are happy to `make it up as they go along' changing plans as new information comes to light.

As a low UAI country the British are comfortable in ambiguous situations - the term `muddling through' is a very British way of expressing this. There are generally not too many rules in British society, but those that are there are adhered to (the most famous of which of of course the British love of queuing which has also to do with the values of fair play).

In work terms this results in planning that is not detail oriented - the end goal will be clear (due to high MAS) but the detail of how we get there will be light and the actual process fluid and flexible to emerging and changing environment. Planning horizons will also be shorter.

Most importantly the combination of a highly individualistic and curious nation is a high level of creativity and strong need for innovation. What is different is attractive! This emerges throughout the society in both its humour, heavy consumerism for new and innovative products and the fast highly creative industries it thrives in - advertising, marketing, financial engineering.

Long term orientation

The long term orientation dimension is closely related to the teachings of Confucius and can be interpreted as dealing with society's search for virtue, the extent to which a society shows a pragmatic future-oriented perspective rather than a conventional historical short-term point of view.

At 25 the UK scores as a short term oriented society which drives a great respect for history and tradition as well as a focus on quick results in the future. As mentioned above, planning horizons tend to be short and business particularly is very focused on short term quarterly goals and quick results. The notion of giving up something today for the promise of something bigger in the future is not a widely held notion, more usual is the belief that `a bird in the hand is worth two in the bush'.

The structure of the London Stock Exchange further perpetuates this pattern - its relentless focus on quarterly results to drive stock valuations exacerbates the culture of focus on short term results. This culture is much discussed in the press with many companies complaining that the LSE drives a culture that gets in the way of genuine longer term relationship building and long term investment projects. The London Stock Exchange is of course a product of British culture!

Hall's Cultural Dimensions model

An attention to the identification of the basic dimension for cultural comparison is found in the works of anthropologist Edward Hall. In his works Hall has always stressed the close relationship between culture and communication. On this ground he defined cultures as a “system” to provide, send, store information. Hall argued that “communication is culture and culture is communication”. The communication process is determined by context. He has defined the 4 dimensions of context:

1. High context vs. low context cultures

2. Monochromic and polychromic cultures

3. Space

4. Information flow

Edward Hall developed a useful way to understand culture by identifying their social framework as low or high context. Low context culture plays less emphasis on the context of the communication (such as implied meaning or non verbal messages). They rely on explicit verbal messages. Great Britain is low context culture. A person from a low context culture usually:

a. Relies on explicit or lateral communication

LCC prefer that messages be explicitly stated rather than simply understood by the parties involved. The following example illustrated the preference for explicit communication in the Am. Midwest as opposed to the higher context of the Am. Southeast.

Suzy Shuffled was district manager for the National wholesale shoes company. After becoming district manager of the SE region she was surprised that the company wanted to transfer her to the Midwest. Suzy who has lived all her life in the Southeast, knew that the move would be difficult and expressed her concerns to a customer who owned a chain of children's shoes stores in Alabama. Tom Womeldorff had lived in Illinois most of his life and talked about the adjustment he and his family had to make when they set up shop in the South. “At first I was to direct but I learnt by listening to my customers how they expected me to communicate. You are a good listener so it won't take you long to figure our Midwesterners. The people up there say what they mean and mean what they say”.

b. Emphasizes verbal communication over non-verbal communication

The phrases “what you mean” and “what you say” is often repeated to children from LCC as they are growing up. Parents pay far less emphasis on communicating indirectly or non-verbally and ask their children to “speak up”. So, by the time they enter business, people from LCC have learnt to rely on words to convey exactly what they mean.

c. Separates job tasks from relationships

People from LCC usually prefer to keep their job tasks separated from their relationships. Indeed, relationships are seen as outside the trust rather than an integral part of it. Even if a key person on a project leaves the company, another person can easily take his / her place, since the business transactions are considered to be between companies and not learned on relationships between people.

d. Emphasizes individual initiative and decision making

Those whose cultures are low in the context tend to value individual initiative, decision making and achievement making, etc. American proverb states “Look out for number one”. Even when they work in groups individuals from LCC try to think of ways to distinguish themselves as individuals. In business a group award is valuable and desired but an individual award is more highly prized.

e. Views employer or employee relationship as mechanistic

In LCC the view of employer or employee relationship tends to be more mechanistic (The term originates from the belief that the business can be run like a “well-oiled” machine). Indeed employees tend to view themselves as a marketable commodity, and will make decisions to change jobs if they can improve their circumstances. Employers can terminate an employee because of negative performance reviews. Likewise, employees feel justified in leaving a job for a better paying one even when they really like their managers and colleagues.

f. Relies on facts, statistics and other details as supporting evidence

People from low context culture tend to require facts, statistics and other reliable data in a business presentation. They trust numbers over intuition as in American proverb “Numbers never lie”. There presentations will be heavy with charts, graphs from experts in their particular field and they will often expect the same level of detailed statistical analysis from others.

g. Uses direct style in writing and speaking

People from LCC prefer to get right to the point of their message. Doing so will help them stay on their time schedule and accomplish the task. Therefore those from low context cultures usually state the reason for the call, letter, e-mail or face-to-face meeting at the beginning and then follow with details of asked.

h. Prefers linier reasoning

Business people from LCC usually prefer a straight line of reasoning. For example, they may start with reasons a particular account is unprofitable and follow to the outcome or effect that the account should be recognized. They also expect that those with whom they do business, will follow the same linier logic. In fact many people are surprised to find that there exist other kinds of logic. For example, in low context cultures the phrase “he used circular reasoning to come to that conclusion” is usually not considered a compliment.

i. Adheres to the letter of the law

People from LCC-s rarely do business on just a handshake. Even if they have excellent report with a business associate, the deal is not considered final until attorneys have written a document that he was agreed to and signed by all the decision makers.

Great Britain is monochronic culture, it means doing one thing at a time. It assumes careful planning and scheduling and is a familiar Western approach that appears in disciplines such as 'time management'. Monochronic people tend also to be low context.

In a monochronic culture, people tend to place a high value on timeliness and schedules. They focus on the value of time, and therefore tend to have a very rigid interpretation of how to organize their schedules. Monochronic people generally prefer to do one thing at a time and to devote their full concentration to the task at hand, whether it be completing an assignment for work or school or having coffee with a friend.



Hall was concerned about space and our relationships within it. He called the study of such space Proxemics. We have concerns about space in many situations, from personal body space to space in the office, parking space, space at home.

The need for space

Some people need more space in all areas. People who encroach into that space are seen as a threat. Personal space is an example of a mobile form of territory and people need less or greater distances between them and others.

British people are more territorial than others with greater concern for ownership. They seek to mark out the areas which are theirs and perhaps having boundary wars with neighbors.

This happens right down to desk-level, where co-workers may do battle over a piece of paper which overlaps from one person's area to another. At national level, many wars have been fought over boundaries.

Territoriality also extends to anything that is 'mine' and ownership concerns extend to material things. Security thus becomes a subject of great concern for people with a high need for ownership. People high territoriality tend also to be low context.

R.Lewis's Model of Culture

Richard D. Lewis is a British linguist, cross-cultural communication consultant, and author. He has developed a model that puts cultures on three dimensions: linear-active, multi-active, and reactive. Lewis' model is relatively comprehensive and good for an initial overview of where cultures fall on each axis. Unlike Hofstede and the GLOBE model, it does not require reading of multiple uncorrelated dimensions. It has most applicability in understanding cross-cultural communications, but limited usefulness in other areas. Being high-level, it is some what restrictive, which stops it from providing the full spectrum cross-cultural factors, and it may be too limited to help provide useful business optimization insight.

The United Kingdom is very close to linear-active culture. Leaders in linear-active cultures generally demonstrate task orientation. People look for technical competence, place facts beforesentiment, logic before emotion; they are deal-orientated, focusing their own attention and that of their staff on immediate achievements and results. They are orderly, stick to agendas and inspire staff with their careful planning.

Linear-active behaviour is an Anglo-Germanic phenomenon originating in north-western Europe and rolling out through colonisation to North America, South Africa, Australia and New Zealand. Among non-Germanic peoples, only Finns have joined this category and even they are partly reactive. Two continents - North America (minus Mexico) and Australasia - are completely linear-active. The strikingly different destinies of North and South America (the latter colonized by multi-active Spaniards and Portuguese) are an indication of the yawning behavioural gap between the two categories. How history would have been different if Columbus had continued on a north-westerly course to Florida or if the Pilgrim Fathers had been blown off course (like Cabral) and settled North-eastern Brazil!